Decline in Tennesseans seeking work tied to record low unemployment

Though the labor market has grown robustly nationwide this year, progress has been uneven across blue states and red states, reports the Wall Street Journal — using Tennessee as an example.

An increasing number of people in red states have stopped looking for work, while a larger share of people in blue states are actively in the workforce.

The participation rate, which shows the number of people who are employed or are looking for work, fell in red states to 62% in September from 62.6% in April, while notching up in blue states to 63.9% from 63.8% over the same period, according to research from the Institute of International Finance. The report categorized a state red if it voted for President Donald Trump in 2016′s presidential election and blue if it voted for Hillary Clinton.

The kinds of jobs available to workers in red states and blue states appear to be driving the trend. Slow-growing sectors like manufacturing and retail are more common in red states, the report notes, while lucrative and rapidly-expanding sectors like technology and life sciences are clustered on the coasts in blue states.

… Declining workforce participation in red states is masked by the states’ seemingly rosy unemployment rates, which have declined quicker than blue states’ unemployment figures. Specifically, the unemployment rate in red states has declined this year to 4.2% in September from 4.8% in January , while the rate in blue states has only ticked down one-tenth of a percentage point, to 4.5% from 4.6%, over the same period.

“It’s a bit of an illusion because the participation rate has been dropping” in the red states, said Mr. Brooks.

Tennessee’s recent record-low unemployment rate illustrates the red-state trend. It declined two full percentage points in just 12 months, hitting a historically low 3%. But the recession pushed many Tennesseans out of the workforce, and the workforce participation rate has trended down since. Almost 65% of the state’s population was in the workforce a decade ago. In 2017, that number was less than 61%.